When entering a foreign market,Anheuser-Busch will contract with a local firm to brew and market the Anheuser-Busch product Budweiser.This is an example of:
A)licensing.
B)franchising.
C)foreign direct investment.
D)foreign subsidiaries.

Question

Quizplus · Accepted Answer

Licensing involves a company contracting with a foreign firm to produce and market its products in the foreign market, in exchange for payment and possibly royalties. This is what Anheuser-Busch is doing by contracting with a local firm to brew and market Budweiser in the foreign market. Franchising involves a company contracting with a foreign firm to use its brand name and operating system in exchange for payment and possibly royalties. Foreign direct investment involves a company establishing its own subsidiaries or operations in a foreign market via capital investment. Foreign subsidiaries involve a company establishing a separate legal entity in a foreign market, which is wholly or partially owned by the company.

When Entering a Foreign Market,Anheuser-Busch Will Contract with a Local